454 PARLIAMENTARY COLBERTISM 
in the paper currency of Scotland’. In that year the 
Bank had to face difficulties, very similar to those which 
sndangered the Bank of England in 1696. The drain of 
bullion, and rumour that the Privy Council were about 
to enhance the coin, caused a run on the Bank. It was 
necessary to make calls upon the proprietors, and to retrench 
expenses by giving up the branches at Glasgow, Dundee, 
Aberdeen, and Montrose; but eventually the credit of the 
Bank was completely restored, and it entered on a period of 
steady prosperity. 
and, after In 1727, the original body found itself exposed to the 
of i K competition of a rival institution, which obtained a charter 
Sra as the Royal Bank of Scotland. It was an offshoot from 
Royal the body of Commissioners, who had been empowered to 
administer the money paid by England to Scotland? as an 
equivalent for coming under a share of the Parliamentary 
obligations with regard to the National Debt. The Com- 
missioners had expended most of the money in meeting the 
claims which arose in connection With the Darien scheme 
and fostering fisheries and manufactures; the balance in 
their hands was considerable, however, and they obtained 
powers to engage, as a corporation, in banking business. The 
competition of the two institutions gave rise to some un- 
seemly contests; each tried by collecting the notes of the 
other and presenting them, with a demand for immediate 
payment, to cripple its rival; and each had recourse to 
such expedients as paying in sixpences to balk the attack. 
Eventually they introduced an “ optional clause?” into the 
notes, and this rendered these hostile demonstrations futile, 
though at some slight sacrifice of the value of the paper, as 
it was no longer convertible at sight. 
This rivalry was not wholly mischievous however; the 
Royal Bank developed a system of giving cash credits for 
a definite amount, to any respectable and industrious person 
for whom two substantial men were ready to vouch. In this 
A.D. 1689 
— 1776. 
t had to 
reduce ts 
operations 
in 1704. 
L Report of Select Committee of House of Lords on Promissory Notes, 1826-7, 
71. 473, printed pag. 96. 
} See above, p. 418. 
8 Kerr, op. cit. 45. 
« Report of Select Committee of Lords on the Circulation of Promissory Notes. 
1826-7. vi. 880, printed pag. 4.